S&J Plumbing, Inc.’s 2010 income statement shows a net profit

Part1 (1page with the references)

• When analyzing statements, what external factors that affect business must be considered?

• Write a 1-page paper including references about the similarities between a firm’s capital budgeting decisions and individual investment decisions.

Part2(1page with references)

S&J Plumbing, Inc.’s 2010 income statement shows a net profit before tax of $468, whereas the balance sheet that the company’s equity for the fiscal year-end 2010 is $1,746.

• Calculate the company’s return on equity and whether the managers are providing a good return on the capital provided by the company’s shareholders.

Diagram the operating cycle of a service company.